There was a happy piece of data that came in first thing this morning. The Consumer Price Index (CPI) did another little round of moderation right as everyone was holding their breath, waiting for the worst of Liberation Day to start hitting.
NOT SO FAST
Inflation eased to a four-year low in April as the nascent impact of President Donald Trump’s sweeping tariffs were offset by their cost-dampening effects in a slowing economy.
Overall consumer prices increased 2.3% from a year earlier, down from 2.4% rise the previous month, according to the Labor Department’s consumer price index, a measure of average changes in goods and services costs.
That’s the lowest annual increase since February 2021 but still leaves inflation moderately above the Federal Reserve’s 2% goal.
On a monthly basis, costs rose 0.2% after dipping 0.1% in March.
Prices for groceries, including eggs, used cars and airfares all fell sharply, while medical services and auto insurance and repairs continued to drift higher.
ATL Fed: annual sticky-price CPI declined in Apr to lowest inflation reading since Oct ’21 while flexible CPI showed a marginal annual decrease (deflation) – very positive development: pic.twitter.com/452WH1Y08x
— E.J. Antoni, Ph.D. (@RealEJAntoni) May 15, 2025
The producer price index (PPI) went negative even though tariff induced price increases had been expected to begin making an impact
Wholesale inflation is actually wholesale deflation.
Big surprise on the downside. pic.twitter.com/xNFmOENCWb— Frog Capital (@FrogNews) May 15, 2025
Food prices took a tumble…
2nd negative PPI print in a row. Big drop in wholesale food prices.
Hey Jerome, you’re too high. pic.twitter.com/Vbc70lszsk— Frog Capital (@FrogNews) May 15, 2025
…even as consumers pulled back a bit and homebuilders scrambled to unload their products.
Homebuilder sentiment down big in May, tying Nov ’23 level; for context, this is less than half May ’22 level and -59% from May ’21 level; builders were already facing record high costs and elevated interest rates, and now 4 in 5 reported pricing problems related to tariffs: pic.twitter.com/EqtdVq2afI
— E.J. Antoni, Ph.D. (@RealEJAntoni) May 15, 2025
Even Trump-averse outlets like Axios had to admit that while there are surely pressures coming which were loaded in by the tariff wars, just maybe the end is not ‘nigh’ but relatively ‘benign’ after all the doomcasting.
These were a couple of their headlines:
- Hard data suggests tariff-driven inflation and recession fears may be overblown
- CPI data shows benign pre-tariff inflation
Pretty amazing. You know it had to hurt.
With major indicators from April — the month of peak tariff uncertainty — now in, none show the kinds of recessionary or inflationary conditions implied by business and consumer surveys.
Why it matters: Warnings and anecdotes are taking on greater importance as signs of how tariffs are working their way through the economy.
The big picture: New data out Thursday showed steady retail sales and a surprising drop in wholesale prices in April. So far, so good.
- But also Thursday morning, the country’s largest retailer warned that it will not be able to absorb tariff-related price increases — even considering the trade war pullback announced earlier this week…
…Between the lines: The Producer Price Index, a gauge of wholesale prices, showed little sign of tariff-related price pressures that businesses have warned about.
- PPI fell by 0.5% in April after a flat reading in March, rounding out an upbeat inflation snapshot after the index’s consumer counterpart released Tuesday.
- Goods prices were flat last month after falling almost a full percentage point in March. Services prices fell by 0.7%, the biggest drop since the index began in 2009.
The bottom line: “There is little evidence, so far, that tariffs are inflationary and instead profit margins are being squeezed. But as Walmart suggested Thursday morning, that is a situation that may not last long,” ING chief international economist James Knightley wrote in a note.
I don’t think the word of caution at the end is uncalled for, either. It’s prudent considering there’s so much yet we don’t know. Our deficit situation is so dire, while our Congress is so do-nothing pathetic – any little upset could be catastrophic.
But this is the right direction, and it’s all you can ask. In fact, it’s probably more than we had a right to expect at this early stage, so we should savor it.
The student loans situation hit the fan today for those who hadn’t caught up or made arrangements on their overdue loans. Today was ‘reporting the delinquencies to credit bureau’ day. And the stunned and upset people with their tales of woe for onehunnertthousanddollar PHILOSOPHY DEGREES (!!!) – among other similar sob stories – was blowing my mind.
$100,000 for a philosophy degree.
The Student Loan program should be eliminated. pic.twitter.com/A01HkNJXsi
— RAMZPAUL (@ramzpaul) May 7, 2025
The ‘I’m not going back for a PhD’ in the above post should be framed and stapled to every gullible moron’s head who is stupid enough to contemplate adding tens of thousands of more dollars to loans in a field that one hundred thousand dollars of education has them working at *checks notes* McDonald’s.
Holy Mother of God.
No wonder they had to change the color on Tide Pods to stop these pinheads from eating them.
ZipRecruiter dropped another fantasy bombshell after surveying Gen Z college students in various programs to see what they anticipate earning as soon as they graduate.
REALITY CHECK, AISLE 5
Universities should be required to post the average starting salaries by major for their graduates each year. BEFORE student loan applications are due to FAFSA.
There is a massive disconnect happening that leads many young people into debt traps pushed by high school… https://t.co/UdNna0rMiv
— Swig 🇺🇸 (@OldRowSwig) May 15, 2025
Man.
Well, the proof’s in the pudding that neither McDonald’s nor believing in Democrat relief promises will pay debts you freely incurred, and today those first real numbers came in for how bad the student loan hole is.
- Missed student loan payments have driven overall consumer debt delinquency to a post-pandemic high. As the Trump administration reverses lenient Biden-era policies, millions of borrowers have seen their credit scores plunge after delinquencies returned to credit reports in the first quarter of 2025.
The Trump administration is cracking down on student loan repayments, driving the debt burden of American households higher as many borrowers struggle to keep up. After a five-year pause, the government restarted collections on defaulted student loan debt earlier this month, and millions of people have already seen their credit scores plunge after such delinquencies returned to credit reports in the first quarter of 2025.
Even more strikingly, missed payments surged even though new delinquency rates for nearly all loan types held steady, apart from a notable exception. Almost 8% of aggregate student debt was reported in “serious delinquency,” or 90 days past due, compared to less than 1% at the end of last year.
Then again, you’d have to be able to do some minimal math to understand the lines and numbers.
NAILED IT!
Yet another way the Biden admin misled America: https://t.co/S4WyckYq1C pic.twitter.com/am9W6R2Uzv— E.J. Antoni, Ph.D. (@RealEJAntoni) May 13, 2025
The garnishments start next month, so that tiny Mickey D’s paycheck is going to shrink even further.
195,000 student loan defaulters will have federal benefits seized starting next month. By summer, 5.3M borrowers face wage garnishment.
Adulthood is about to hit them.
— Beefbooger (@beefbooger) May 8, 2025
One might as well wax philosophical about the situation ‘cuz, as Eddie Murphy once said, ‘You brought that s**t on yo’self.’
Chin up, though – we know things could be much worse.
